Pakistan & AI

The recent Human Development Report published by the UNDP presents a stark reminder of Pakistan's precarious position in the global digital and economic order. Ranked among the 26 countries with the lowest Human Development Index, Pakistan is at a critical inflexion point - one where the decisions made today will determine whether it advances with the rest of the world or is left further behind.

The theme of this year's report focuses on AI and its vast potential to accelerate human development. While many nations have begun leveraging AI to enhance economic productivity, improve governance and reform public service delivery, Pakistan's digital ecosystem remains largely unchanged. This is despite the country being home to one of the largest freelancing communities globally and a promising, youthful tech workforce.

Unfortunately, as the report highlights, Pakistan has not capitalised on its digital potential. Digital inequalities, shaped by broader socioeconomic divides, continue to restrict access to education, infrastructure and opportunity. These gaps are not only limiting individual potential but are also constraining national progress.

Meanwhile, the global race to dominate AI is accelerating rapidly. In a striking display of strategic diplomacy and economic ambition, US President Donald Trump recently visited the Middle East, accompanied by top executives from major American tech companies, such as Elon Musk, OpenAI's Sam Altman, Nvidia's Jensen Huang and Palantir's Alex Karp. During high-level meetings with leaders from Saudi Arabia, the UAE and Qatar, these tech leaders negotiated and finalised transformative AI investment deals worth billions of dollars.

One of the most notable outcomes was a $500 billion agreement between OpenAI and the government of Abu Dhabi. The deal is set to create one of the world's largest AI hubs in the UAE, covering 25 sq-km and requiring energy equivalent to five nuclear reactors. With this, the UAE positions itself as the regional epicentre for AI development, while Saudi Arabia and Qatar are also securing similar strategic partnerships with US tech giants.

These developments are not distant diplomatic footnotes; they carry direct consequences for Pakistan. For decades, Pakistan's economy has relied heavily on exporting labour - both low-skilled workers and highly-trained professionals - to the Gulf. The remittances they send home form a substantial pillar of the country's forex reserves. However, as Gulf countries pivot toward AI-driven automation to replace manual, repetitive and even complex cognitive tasks, the demand for foreign labour is likely to decrease dramatically.

According to experts, roles such as cashiers, truck drivers and clerical workers are among the first to be automated. Even software developers and specialists in fields like radiology and pathology may eventually be displaced by machines capable of performing such tasks faster and more accurately. With nearly 42% of Pakistan's workforce engaged in jobs vulnerable to automation, the risks are not hypothetical; they are imminent.

Compounding the challenge is Pakistan's internal digital divide. The UNDP reports that half of the country's population still lacks access to smartphones, computers and reliable internet connectivity. This means millions are not only excluded from the digital economy but are also unprepared for the transformations it will bring. Without urgent intervention, this divide could become a chasm, further marginalising vulnerable groups and reinforcing systemic inequalities.

While Pakistan has made some progress with initiatives like the National AI Policy 2024, policy documents alone cannot drive change. What is required is a coordinated, long-term national strategy focused on three key priorities: expanding digital infrastructure and access; investing in digital skills and education; and preparing public institutions to manage and regulate AI development effectively and equitably.

The AI revolution presents an opportunity, but a profound challenge too. If Pakistan fails to act with vision and urgency, it risks being economically and strategically sidelined in a world where AI is rapidly becoming the defining force of progress.